There are many things you need to take in when buying a home (first time buyer or not) — the lingo being one of them. Real estate, like many other professions, has its own language. Let’s get out your real estate passport, learn some critical terms, and get you on your way to navigating your home-buying experience a bit better. Knowing the lingo will put you in a better position to ask the right questions and make the best decisions.
- Buyer’s Market – A real estate climate where the number of listings outnumbers qualified buyers. Translation: you can afford to pick and choose.
- Seller’s Market – A real estate climate when there are very few desirable properties listed for sale. You will need to act fast and be prepared to make multiple offers.
- Contingencies – Specific conditions included in an offer to protect the buyer against unexpected situations, such as inspection, loan approval, and appraisal value.
- Earnest Money – Money deposited when the offer is accepted. Subject to any contingencies, this money protects the seller from a buyer who simply changes their mind.
- Escrow Agent – A neutral 3rd party who manages the paperwork in a state where attorneys are not used to conclude the contract.
- Closing Costs – Fees that must be paid by both buyers to conclude the sale. Ensure you know what these are and account for them ahead of time.
- Conforming Loan – A conforming loan is a loan limit by which the loan can be sold on the secondary market; a jumbo loan is one which is higher than this limit.
- PMI – PMI, which translates to Private Mortgage Insurance, is a fee paid by the borrower of a loan they obtained with less than a 20% down payment.
- HOA – Homeowners Association. Typically seen in planned communities or condominium developments, The association provides rules and regulations that the homeowner must abide by. It may also deal with maintenance costs and there is always an associated fee.
- SID/LIDS – This fee is generally present in planned communities and is tied to a property. An assessment is paid annually (until complete) for the initial installation of sewer plumbing, streets, water hydrants, and lighting.
Phew! This is by no means a complete list, but it should give you a leg up when starting your home search. If something else comes up that you don’t understand, reach out to your friendly real estate professional (hint hint, details below!) and they will ensure you are in the know.