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Hey there, future homeowners and language enthusiasts! Get ready to step into the world of real estate – it’s like a party with its own set of fancy words. Don’t worry, we’re here to help you unravel the mystery of those jargon-y terms. Think of us as your friendly tour guides through the dictionary of home buying. Let’s jump in and have some wordy fun!
1. MLS: The Home Shopping Mall
MLS sounds like an acronym that should be on a secret agent’s badge, but it’s actually the Multiple Listing Service. It’s like the ultimate shopping mall for homes – almost every house up for grabs is right here for agents around the area to see.
2. CMA: Price Tag Comparison
CMA isn’t a radio station – it’s a Comparative Market Analysis. Think of it as a price tag comparison, where homes strut their stuff to see who’s the most valuable in the neighborhood. An effective agent (like me) will provide real time market information on similar homes that have sold or are for sale so you can make an informed pricing decision.
3. Contingencies: The “What If” Party
Contingencies are like the “what ifs” of real estate. They’re the safety nets that keep the deal from turning into a drama-filled reality show. Want to make an offer on a home but also want to make sure that it’s inspected by a professional? There’s a contingency for that. Need to sell your home to finance your next purchase? There are contingencies for that too!
4. Escrow: The Neutral Middle Ground
Escrow is like a peaceful neutral ground in the real estate battlefield. It’s where money and important documents hang out until the deal’s ready to roll. This is also where your insurance and taxes (the back half of PITI) will be held throughout the year until it’s time to make those payments.
5. Appraisal: The House Review
Appraisal is like the official house review. It’s where a pro checks out your home, making sure it’s not priced like a golden unicorn or a garage sale find. Do not confuse this with an inspection – which is when a professional comes out and determines what other professionals, if any, are needed to determine the condition of the home and it’s many systems (like HV/AC, plumbing, foundation, pests, insulation, electrical, etc.).
6. PMI: The Loan Cushion
PMI stands for Private Mortgage Insurance – your loan cushion. It’s there to ease the lender’s worries if your down payment’s on the smaller side. Typically any transaction with less than 20% equity will require this with conventional lenders.
7. Equity
Equity is basically how much cash you’d receive if you sold your home and paid off your outstanding mortgage and liens (if any) today.
8. Title Search
Title search is like a history check for a property. It’s making sure there are no skeletons in the real estate closet. Imagine 4 owners ago the Will wasn’t probated properly, and now the great great grandson of that owner knocks on your door claiming you’re in their house. What do you do? Title research will help prevent situations like this – and Title Insurance will make sure the title company’s attorneys are with you if this does happen.
9. Earnest Money
Earnest money is like a promise pot – a deposit to show the seller you’re serious about buying. It’s your way of saying, “I’m in, let’s do this!” It counts towards your down payment. (OPTION MONEY DOES NOT!!!!) If your contract is properly structured, this money is often protected and can be recovered. Missing deadlines is the easiest way to lose this money if you end up not closing on the home. There is no set standard on what this amount should be in Texas.
10. Closing Costs
Closing costs are all of the fees it takes to complete a transaction. Often, an escrow officer, title company, agents on both sides of the transaction, and lenders all get paid from this. Some of these fees are negotiable, some are not. Some you can shop around for different providers, some you can not.
11. Pre-Approval: The Green Light
Pre-approval is really a must in this market. A lender says, “You’re good to go, start shopping!” Further, how can you know what your budget is if you haven’t seen what you would be approved for?
12. PITI
Principal, Interest, Taxes, and Insurance. This is your monthly mortgage payment. Your Principal and Interest are determined by your lender. Taxes are determined by your municipality and your own exemptions. Insurance is typically homeowner’s insurance but could also include PMI for conventional lenders (Private Mortgage Insurance) or MIP (Mortgage Insurance Premium) for FHA conforming loans.
Real estate lingo might sound like a foreign language, but with this friendly guide, you’re all set to conquer the home buying word maze. From MLS to pre-approval, consider yourself armed with the knowledge to chat like a pro. So, let’s make those real estate terms your new best friends as you journey through the world of home buying!
Happy house hunting, language lovers – may your quest for the perfect home be as exciting as discovering a new word!
What are you waiting for? Call me today at 817-994-4444.
Are you ready to begin your search for the perfect home? Are you ready to sell? I am ready to help you.
I live here. My children go to school here. I specialize here.
Let me help you “Live Life Grand in Grand Prairie”!
