Selling a home involves more than just getting your property listed on real estate websites. It also involves understanding a myriad of terms and processes that can be overwhelming for first-time sellers.
To navigate the real estate market successfully, it's crucial to familiarize yourself with key terminology. Here are ten important real estate terms every home seller should know in 2024.
Buyer's Agent
A buyer's agent represents the interests of the homebuyer. Engaging with a buyer's agent is common in real estate transactions, and understanding their role is essential for sellers. They negotiate on behalf of the buyer and assist in securing the best deal.
Listing Agent
On the seller's side, the listing agent is the professional responsible for marketing and selling the property. They help set the asking price, market the home, and guide the seller through the intricacies of the selling process.
Contingency
Contingencies are conditions outlined in the purchase and sale agreement that must be met for the deal to proceed. Common contingencies include home inspections, financing, and appraisal contingencies.
Appraisal
An appraisal is an evaluation of a property's value conducted by a certified appraiser. Lenders use this assessment to determine the maximum amount they are willing to lend to the buyer. Understanding the appraisal process is crucial for sellers, as it impacts the home's marketability.
Affidavit of Title
This legal document confirms the current status of the property's title. Sellers may need to provide an affidavit of title to assure buyers that the property is free from legal issues or encumbrances.
"As-is"
When a property is sold "as-is," it means the seller is not willing to make any repairs or improvements. This term should be clearly communicated to potential buyers to manage expectations.
Due Diligence Period
The due diligence period is a specified timeframe during which the buyer conducts inspections and investigations. Sellers should be aware of this period as it is a crucial time for buyers to assess the property thoroughly.
Equity
Equity is the difference between the home's market value and the outstanding mortgage balance. Understanding your equity position is vital for setting a realistic asking price and negotiating a favorable deal.
Purchase and Sale Agreement
This legal document outlines the terms and conditions of the home sale. It includes details like the purchase price, closing date, and any contingencies. Sellers should carefully review and understand this agreement before signing.
Covenants, Conditions & Restrictions (CC&R)
CC&Rs are rules and limitations that govern a property, often found in planned communities or homeowners' associations. Sellers must disclose these restrictions to potential buyers to avoid any misunderstandings.
READ NEXT: 7 Best Real Estate Side Hustles for Agents in 2024
