Have you thought about investing in real estate or becoming a real estate agent?
If so, there are certain terms in real estate that you should know about. This will help you understand how the real estate industry works and will help you in your career.
Make sure you also seek advice from professional real estate agents to help you further understand the terms in this guide.
Here are the terms in real estate you should know:
Best Terms in Real Estate You Can’t Afford to Not Know
This term is crucial if you’re interested in real estate appraisal. A title search involves researching the history of a property and its ownership.
It also looks at purchase agreements, property taxes, and other associated costs for the property. Often, investors will want to examine these documents before agreeing to buy a property.
The meaning of under contract is one of the most important terms you’ll need to know if you’re aiming to attain a real estate license.
When the buyer and seller come to a verbal agreement they then begin preparing a contract. This period of negotiations until the contract gets prepared and signed is the ‘under contract’ session.
The final agreement is known as the PSA — Purchase and Sale Agreement.
This term refers to any particular incentives or special offers that the seller presents to potential buyers.
This usually occurs when the seller is having trouble finding a buyer. If a buyer is hesitant to buy a property, a seller will almost always jump in with a seller concession.
Subject to Inspection
With this agreement, you’ll have to put forth a down payment and agreement to buy a property. This will have to be put forth before you can inspect the property.
This might seem daunting but is often standard practice in many cases. Often this is done for privacy concerns or to attract serious prospects only.
You’ve likely often seen a few houses under a tent while a pest control crew tries to kill termites.
Many buyers will want a pest control service to assess the property before committing to buying it. The buyer will request a termite report before they sign the Purchase and Sale Agreement.
Proof of Funds
Before a Purchase and Sale Agreement, the seller might request proof of funds from a buyer. The seller wants to ensure that the buyer can make a down payment.
They’ll also want to ensure that the buyer can qualify for a mortgage if needed. Proof of funds can include bank statements, payment stubs, tax returns, etc.
Learn These Terms in Real Estate
Now that you know these terms in real estate you’re better prepared for a career as a real estate agent.
From the buyer’s side, you’ll want to know about title search to learn about the history of the property. You want to know about the ‘under contract’ period before signing the purchase agreement.
Sellers will also request proof of funds from potential buyers. They might also request a down payment in the case of a subject to inspection scenario.
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