Essential Real Estate Terms Sellers Should Know
Updated: Jan 23
You, like the majority of people, may be unfamiliar with real estate terminology. Do you want to purchase, sell, or learn more about real estate? Look no further.
In this article, We'll go through the most often used real estate terminology to assist you to navigate the market with ease.
When a property is listed in "as is" condition, it usually means the seller is unwilling to make most, if not all, repairs. It could also signify that it's being sold "as is," which means it's less than market value in the area.
Finally, “as is” refers to the condition of the property at the time the offer was written; if something happens to the property between the time the offer was written and the closing time that changes that condition, the property is no longer “as is” and must be restored to its original “as is” condition at the seller's expense. Alternatively, the seller could release the buyer from their purchase agreement and reimburse any payments paid by the buyer, such as earnest money.
The number of days between the day the property is offered for sale on the local real estate brokers' multiple listing service (MLS) and the date the seller signs a contract to sell the property with the buyer is referred to as the DOM.
Because there is a perception that a property with a high DOM value is pricey or less desirable, properties with a large DOM value will often command lower prices than properties with a low DOM value. DOM is frequently considered while formulating a pricing strategy.
A seller's disclosure is when a seller discloses information regarding the property, or information that could influence a buyer's choice to buy the property, to the best of the seller's knowledge.
Pest problems, property line disputes, knowledge of major construction projects in the area, military base-related noises or activities, association-related assessments or legal issues, unusual odors caused by a nearby factory, or even recent deaths on the property must all be mentioned by the seller.
An appraiser uses comparable sales to determine how much a home is worth based on what other similar properties in the neighborhood have recently sold for.
If a house is on the market, the agent who is selling it will refer to the most recently sold houses in the vicinity. So, if a house sold for $590,700 in the previous six months, the real estate agent would price the home they're selling in that range.
Only legally closed residences are considered comparables, and most lenders and insurance companies require appraisers to use at least three closed sales.
Determining your listing price, also known as your asking price, is a critical step in attracting the ideal buyer to make an offer. If you get your listing price right from the start, you'll have a faster sale and, more than likely, the best price the market will bear.
All house pricing strategies start with determining the projected market value of your home based on recent comparable sales. Recent comparable sales will set the tone for what buyers in the present market should expect to pay for homes. Then, based on your timeframe and goals, you'll be able to compare your property to others and factor in any market circumstances that are growing or declining to determine a listing price that is market value, above market value, or below market value.
A contingency, by definition, is a clause in a real estate contract that makes the contract null if a specific event occurs. Consider it a safety net that can be activated in specific situations. It's also referred to as a condition.
In most real estate contracts and transactions, a variety of contingencies are expected. Any condition can be proposed by either the seller or the buyer; it's all part of the back-and-forth bargaining. Some contingencies, however, are more common than others, occurring in almost every contract.