Real Estate Terms That Everyone Should Know Pt. 2
Real Estate Agent or Realtor
If you are in the market for looking for a new home or even selling your home, you would be going through someone who handles the process. This is a Real Estate Agent or Realtor. Behold, there is also a difference. There’s the buyer’s agent, who represents the party trying to buy a property. Then there’s a listing agent, who represents the party selling the home or property. It is also important to note that one agent does not represent both parties in a real estate transaction.
If someone is selling their property and thinks that their home is not looking good enough to obtain an offer as the condition that it is already in, they can offer concessions to make that home or property more appealing to potential buyers. These concessions vary but can often include loan discount points, help on closing costs, credit for needed repairs, and paid insurance to cover any future pitfalls.
A contract can be commonly referred to in the real estate world as a purchase, a sale contract or even a purchase contract. The document often outlines the terms surrounding the sale of a property. Once both the buyer and seller have agreed to a price and terms of sale, a property will then be under contract. Contracts often include such things as an appraisal, inspection, and financing approval.
In every contract, there is usually a contingency which is an order that needs to met in order for the sale to be completed. These include the home appraisal as well as financial requirements and such timeframes that need for the work to be done. If the contingencies are not met, the buyer can opt out of the home sale without losing their money deposit.
Once a seller accepts a buyer’s offer on a home or a property, the buyer makes a deposit to put a financial claim on the property. This is called earnest money and it is usually 1% – 3% of the overall contract price. The overall point of earnest money is to protect the seller from the buyer walking away even though the contract has been agreed upon. It is a reassurance or for a liability purpose overall. If one of the contingencies in the contract is not met, the buyer can back out of the contract without losing their earnest money.
When a buyer decides that they want to buy a home or property, they make an offer to do so. The offer can be at the list price or it can be below or above it, depending on market conditions and the prior offers before. If the seller accepts the offer, it becomes the buying contract. Please note though that the seller can also make a counteroffer or reject the offer.
Real Estate Investor
For many reasons that can be follow, some sellers may not want to list their property on the open market. Or they need to sell their home quickly because for relocation, change of job, etc. A real estate investor will purchase property for cash without the need for inspections, agent commissions, or listing fees.