We here at Team SURGE want our clients to understand every aspect of the buying and selling of real estate process in hopes to make your experience as enjoyful and smooth as possible. Below is a Quick Guide to Real Estate Lingo that we hope you find very valuable. Enjoy.
For Sale By Owner (FSBO) – is when a seller chooses to sell his home on his own. There is an article we here at Team SURGE wrote for a better understanding of FSBO’s. Follow this link to the article.
Comparative Market Analysis (CMA) – or “Competitive Market Analysis” is a report compiled by REALTORS® that shows home values comparable to another home that was recently sold, pending sale, or active listing that’s for sale on the market.
COMPS – Also known as comparables, are considered by most to be the single-best tool in determining a property’s value. COMPS is compiled information from recently-sold, active, or pending properties in a neighborhood, age of the home, size, and square footage as well. REALTORS® use COMPS to prepare CMA’s for their clients.
Closing Cost – The miscellaneous expenses paid by the buyer, and the seller, when the real estate transaction closes. These expenses include, but are not limited to, the agents commission’s, mortgage fees, title/escrow fees, attorney’s settlement charges (depending on where you live), transfer/prorated taxes, recording fees, and title insurance premiums.
Escrow – is something of value such as your earnest money check, and/or documents such as your purchase and sales agreement, that are given to a third party to hold until the specific conditions, and terms, are met. When everything is completed, all parties are paid, and the deed recorded with the county the Escrow will close.
Earnest Money (EM) – is where a buyer deposits funds in a third party escrow/trust account to show good faith to the seller in a real estate transaction. Earnest money allows the buyer additional time when seeking financing as well.
Contingency – Is a written agreement between both parties that keeps the transaction from being fully, and legally, binding to both parties until a certain condition is met. A great example of this is where a buyer needs to sell their home before they can purchase the home that has the contingency on it.
MLS – “Multiple Listing Service” is an organization that collects, compiles, and distributes information about real estate properties listed for sale by MLS members, who are real estate brokers. Membership isn’t open to the general public, although selected MLS data may be sold to real estate listings web sites. MLSs are local or regional. There is no MLS covering the whole country.
Settlement – is when both Buyer and Seller have signed and delivered to each other, or to the escrow/closing office, all documents required by agreement, by the Lender, by the title insurance and escrow/closing offices, by written escrow instructions (including any split closing instructions, if applicable), any monies required to be paid by Buyer and/or Seller under these documents (except for the proceeds of any new loan) have been delivered by Buyer or Seller to the other party, or to the escrow/closing office, in the form of cash, wire transfer, cashier’s check, or other form acceptable to the escrow/closing office, and all State laws have been satisfied.
Closing – is when all “Settlements” have been recorded with the County and all parties terms have been successfully met.
Seller Disclosures (SPCD’s) – is an obligation the seller(s) have under Utah Law, regardless of occupancy, to disclose to the buyer(s) defects in the property and facts known to the seller(s) that materially and adversely affect the use of value of the property that cannot be discovered by a reasonable inspection by an ordinary prudent buyer(s).
Due Diligence – is a time period in a real estate contract where a buyer(s) has an obligation to thoroughly investigate the subject property within a specified time to determine whether the buyer remains satisfied with the property before finalizing the purchase. If the buyer’s investigation uncovers defects with the property, the buyer may either propose a solution to the seller, in writing, an addendum to the real estate contract, or cancel the purchase according to the terms of the real estate contract. Zillow has a great article on this subject. Just follow the link provided.
REALTORS® – A real estate agent, or broker, who is a member of the National Association of REALTORS®. Not all real estate agents are REALTORS® so make sure you know your agent is a REALTORS® before working with such agent.
Title Insurance – Is an insurance policy that protects lenders and/or owner’s interest in real property from different types of liens or fraudulent claims of ownership. It’s customary in Utah for sellers to pay for Title Insurance for the buyer. If the lender requires Title Insurance, then its customary for the buyer to pay for the additional Title Insurance.
Listing – A written, and signed, agreement between a real estate broker/agent and the homeowner(s) that allows the broker/agent to market the home, arrange for the sale of the home, and how the broker/agent can sell the home. The word “Listing” is also used as the for-sale home itself. A FSBO without a listing agreement is not a “listing.”